Many multifamily property investors are anticipating the impact of Oregon Senate Bill 608. In fact, a lot of investors are now considering making the switch to commercial real estate. René Nelson, CCIM, CRE with Pacwest Commercial Real Estate explores some of the benefits of commercial real estate investment.
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Why Sell Your Multifamily Property and Move into Commercial Real Estate?
One thing that a lot of investors are saying to me is “Okay. I want out of multifamily. What does that look like?” If you are thinking about going into commercial real estate, one factor that you might consider would be the fact that there is no rent control when you’re dealing with commercial property. Another great benefit is that most commercial tenants stay longer. In an office building as an example, they typically sign leases for a minimum of three to five years and with options to renew. If you’re looking at a single tenant single asset, like a Dollar General, an AT&T store, a Verizon store, or something similar, those tenants typically stay anywhere from 10 to 15 years. I’m going to show you a couple of examples of what that could look like. Often, they are corporately guaranteed for an AT&T or a Verizon or a Dollar General.
That means in the event they move out of that building, their corporate guarantee continues to ensure your rent, even if they decide that they no longer want to be in that location. Furthermore, the tenants are typically responsible for maintenance and repair on a Dollar General as an example. The reason I use the Dollar General example is that we have seen a lot Dollar Generals open up in outlying areas: Monroe, Glide, Harrisburg, Oak Ridge. I’m sure you probably have seen at least one or two of them in the state of Oregon. One of the benefits of those properties is that they do not want the landlord on the property at all. Dollar General does not want you to even show up and pick up a Popsicle wrapper off of the property. That is their responsibility and that is built into their lease where they are responsible for the maintenance and repair of the property.
“No investor should have to roll the dice on their financial freedom!™” When you are considering your options, get an expert on your team: René Nelson, CCIM, (541) 912-6583.
Where do I learn more? Visit Pacwest Commercial Real Estate’s Oregon Rent Control Central for the latest information.
Disclaimer
Due to the complex nature of these changes, Landlords should contact an attorney with any questions or clarification of Oregon Rent Control SB 608.
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